Williams-Sonoma Inc (WSM)
Cash conversion cycle
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 219.83 | 253.05 | 228.67 | 236.99 | 243.59 | 274.41 | 251.40 | 230.98 | 208.79 | 216.82 | 212.87 | 216.01 | 210.95 | 246.42 | 230.24 | 232.03 | 240.07 | 271.29 | 258.42 | 252.59 |
| Days of sales outstanding (DSO) | days | 5.79 | 5.72 | 5.17 | 4.67 | 4.87 | 5.27 | 5.68 | 5.35 | 5.83 | 6.33 | 6.67 | 7.12 | 7.73 | 7.48 | 7.81 | 6.49 | 6.91 | 6.82 | 6.99 | 6.53 |
| Number of days of payables | days | 107.22 | 122.37 | 104.96 | 106.45 | 85.03 | 117.19 | 110.85 | 106.31 | 102.61 | 108.81 | 109.46 | 114.18 | 113.83 | 123.11 | 82.41 | 91.75 | 113.70 | 95.77 | 87.97 | 84.31 |
| Cash conversion cycle | days | 118.41 | 136.40 | 128.88 | 135.21 | 163.42 | 162.48 | 146.23 | 130.01 | 112.01 | 114.34 | 110.09 | 108.95 | 104.85 | 130.78 | 155.65 | 146.77 | 133.28 | 182.35 | 177.43 | 174.81 |
January 28, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 219.83 + 5.79 – 107.22
= 118.41
The cash conversion cycle of Williams-Sonoma Inc fluctuated over the past twenty quarters, ranging from a low of 104.85 days to a high of 182.35 days. The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Typically, a shorter cash conversion cycle indicates more efficient cash management and working capital utilization.
During the period under review, Williams-Sonoma Inc showed some variability in its cash conversion cycle, with a general trend of improvement in the more recent quarters. This improvement suggests that the company has been more effective in managing its inventory, accounts receivable, and accounts payable, resulting in a more efficient cash flow cycle.
Overall, a declining trend in the cash conversion cycle is a positive sign for Williams-Sonoma Inc, indicating improved liquidity and operational efficiency. However, it is essential for the company to continue monitoring and optimizing its working capital management to sustain this positive trend.